European Integration and Agriculture Protection

The common Agricultural policy is a price policy, giving farmers a price-guarantee and protection from outside suppliers. Why is that? It is a fact that all capitalist countries have agricultural protection in one form or another and for various reasons. One of the best reasons is the free market’s inability to reach stability and to achieve income parity for farmers. There are also other reasons. Switzerland and sweden have protected their agriculture so that in times of war, in which they prefer to be neutral, their agriculture and food supply can be independent. Also, the conservation of agricultural topsoil and landscape can be a reason for agricultural protection; for example as in Norway of Austria. There are countries with a long tradition of agricultural protection, such as France and Germany, but most other countries have only had such policies since the great depression of the 1930s.

Why was it so hard to reach an agreement in the Uruguay Round to reduce agricultural protection? After surveying the growth of agricultural protection in the 1980s, I develop arguments based on political economy that imply a systematic tendency for governments to protect farmers increasingly, at least up to some threshold, as economic development proceeds. Agricultural protection growth in industrializing countries is therefore normal, not exceptional. Liberalizing those policies before reaching that threshold is unattractive politically unless new influences, e.g. from abroad, upset the domestic political equilibrium. The Uruguay Round provided such a force.
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\nWhat made the early 1990s so significant a crossroads for farm policy reform was that coincidently there were other changes taking place in Europe which lowered the domestic political cost of reforming the EC's Common Agricultural Policy. The paper argues that the reforms to farm policy during the rest of this decade as a result of the Uruguay Round agreement will at best be slow and messy – but that is far preferable to the alternative of a failed Uruguay Round and continued growth of agricultural protection.

This empirical study uses 100 years of annual data on 11 agricultural commodities from Belgium to measure the impact of structural changes coinciding with economic development and changes in political institutions on agricultural protection. The analysis shows that changes in agricultural protection are caused by a combination of factors. Governments have increased protection and support to farmers when world market prices for their commodities fell, and vice versa, offsetting market effects on producer incomes. Other economic determinants were the share of the commodities in total consumer expenditures (negative effect) and in total output of the economy (positive effect). With Belgium a small economy, there was no impact of the trade position. Changes in political institutions have affected agricultural protection. Democratic reforms which induced a significant shift in the political balance towards agricultural interests, such as the introduction of the one-man-one-vote system, led to an increase in agricultural protection. The integration of Belgian agricultural policies in the Common Agricultural Policy in 1968 coincided with an increase in protection, ceteris paribus. Both institutional factors, related to changes in access to and information about the decision-making at the EU level, and structural changes in the agricultural and food economy may explain this effect.

This empirical study uses 100 years of annual data on 11 agricultural commodities from Belgium to measure the impact of structural changes coinciding with economic development and changes in political institutions on agricultural protection. The analysis shows that changes in agricultural protection are caused by a combination of factors. Governments have increased protection and support to farmers when world market prices for their commodities fell, and vice versa, offsetting market effects on producer incomes. Other economic determinants were the share of the commodities in total consumer expenditures (negative effect) and in total output of the economy (positive effect). With Belgium a small economy, there was no impact of the trade position. Changes in political institutions have affected agricultural protection. Democratic reforms which induced a significant shift in the political balance towards agricultural interests, such as the introduction of the one‐man‐one‐vote system, led to an increase in agricultural protection. The integration of Belgian agricultural policies in the Common Agricultural Policy in 1968 coincided with an increase in protection, ceteris paribus. Both institutional factors, related to changes in access to and information about the decision‐making at the EU level, and structural changes in the agricultural and food economy may explain this effect.

Fat of the land

The European Economic Community's Common Agricultural Policy (CAP) has found a lot of scholarly attention. While economists stress the irrationality of the CAP and explain its striking persistence by rent-seeking behavior, a prominent interpretation among historians is that the CAP should be interpreted as welfare policy for farm households. I subject the latter hypothesis for the period 1962–92 to an empirical test and find that the combined benefits from subsidies, import protection, and political prices gave much more benefits to European agriculture than any welfare policy could have achieved. If one still wants to find arguments legitimizing the political rents (or part of them) that agriculture received through the CAP one has to consider non-economic arguments (food security in the Cold War) or external effects (protection of the environment or landscape).

I. History 1. West European Economic Integration since 1950 (Nicholas Crafts) 2. The History of European Economic and Monetary Union (Harold James) 3. History of Economic Thought and Policy-Making at the European Commission (Ivo Maes) II. The Single Market and the Euro 1. The Economics of the Single Market (Harry Flam) 2. Factor Movements: FDI (Bent Sorensen, Carolina Villegas-Sanchez) 3. The Euro as an International Currency (Agnes Benassy Quere) III. Monetary and Fiscal Policy 1. The Common Currency: More Complicated than it Seems (Charles Wyplosz) 2. Design Failures in the Euro Area: Can They Be Fixed? (Paul De Grauwe) 3. The Credit Channel of Monetary Policy in the Euro Area (Angela Maddaloni , Jose Peydro) 4. Fiscal Policy in the EU: An Overview of Recent and Potential Future Developments (Roel Beetsma) 5. The Roles of Fiscal Rules, Fiscal Councils, and Fiscal Union in EU Integration (Lars Calmfors) IV. Trade Issues 1. European Integration and the Gains from Trade (Gianmarco Ottaviano) 2. The Effects of European Integration on the Stability of International Trade: A Duration Perspective (Tibor Besedes) 3. EU Trade Policy (Andre Sapir) 4. The EU and the US: TTIP (Gabriel Felbermayr) 5. The EU and the ACP Countries (Ludger Kuhnhardt) V. Selected Policy Areas 1. Regional Policy (Sascha Becker, Peter Egger,Max von Ehrlich) 2. The Common Agricultural Policy (Johan Swinnen) 3. Labor and Social Policy (Giuseppe Bertola) 4. Tax Competition and Tax Coordination (Christian Keuschnigg, Simon Loretz, Hannes Winner) 5. Financial Market Integration, Regulation and Stability (Angel Ubide) VI. The Crisis 1. The Crisis in Retrospect: Causes, Effects, and Policy Responses (Fritz Breuss) 2. Exceptional Policies for Exceptional Times: The ECB's Response to the Rolling Crises of the Euro Area (Lucrezia Reichlin, Huw Pill) 3. Living (Dangerously) Without a Fiscal Union (Ashoka Mody) 4. Reforming the Architecture of EMU: Ensuring Stability in Europe (Jakob de Haan, Jeroen Hesseland, Niels Gilbert) VII. Institutions 1. The Political Economy of European Integration (Enrico Spolaore) 2. Efficiency, Proportionality and Member States' Power in the EU Council of Ministers (Nikolaos Antonakakis, Harald Badinger, Wolf Heinrich Reuter) 3. Measuring European Economic and Institutional Integration (Helge Berger, Volker Nitsch) 4. The Dynamics of European Economic Integration: A Legal Perspective (Erich Vranes)

The purpose of this paper is to review the history of the Common Agricultural Policy (CAP) reform, and then to examine the mid-term review (MTR) of Agenda 2000, which was published in July 2002 by European Commission as a part of the 1999 reforms.The objectives of the CAP were set up in the Treaty of Rome, Article 39 and the policy has been operated under Stresa principles: a single product market, so-called Community preference, and financial solidarity among the Member States.These objectives of the CAP have not been revised since they were set out in the Treaty of Rome, while the European Treaty has revised the Treaty of Rome, the Maastrich treaty, the Amsterdam Treaty and the Nice Treaty. This reflects the fact that these objectives have been accepted while the operation of the CAP has posed many problems and has been begging for reform since early 70s.In the long history of reforms, the agreement on the MacSharry reforms of the CAP in 1992, implemented from 1993, marked the beginning of a new phase. Its basic aim was to decouple the income problem of EU agriculture from price policy which would be more oriented towards the efficient functioning of the agricultural market.An agreement was reached on Agenda 2000 at the Berlin European Council in March 1999. Agenda 2000 explicitly established economic, social, and environmental goals within a new reformulated set of objectives for the CAP. But indeed, seldom has a Commission proposal come through such a long and difficult negotiating process and remained so intact as these proposals on CAP reform. At that time the Commission severely miscalculated both the timing of its new attempt at CAP reform and the forces it could use. Then the Commission scheduled to review it again in detail in 2002.In July 2002 the new round of debate on CAP reform, the mid-term review (MTR) of the Agenda 2000, was launched by the EU farm Commissioner Franz Fischler. The first task of MTR is a stocktaking and improvement of the Agenda 2000 reform process.The basic and main proposal of MTR is decoupling of direct aids and establishment of a farm income payment. This payment will be based on historical payment adjusted to take into account the full implementation of Agenda 2000. In my paper, the basic idea of decoupling direct aids payment from production is criticized in that its outcome may be not decoupled, since the base their distribution upon historic yields and production entitlements.On the other hand, MTR instructed Member States to introduce an element of cross-compliance into farm policies, so that a farmer's direct aid payment would be paid in full if certain environmental criteria had been fulfilled. This means that the EU will want also to secure and maintain the Peace Clause on the next WTO round.In my perspective of the CAP reform thus far, EU has to apply the principle of subsidiarity to reforming process of the CAP more practically as it's political economics.

Contents: Preface Establishing the Common Agricultural Policy Agriculture and the European environment Integrating environmental protection in agricultural production policies Environment and rural development policy Agri-environment policy Organic farming Agriculture and nature conservation Regulating agricultural pollution Agriculture and food safety Agriculture, the environment and international trade Index

European policies and instruments such as the Common Agricultural Policy (CAP) and many instruments for nature and landscape conservation in Europe have for some decades been dominated by centralisation and standardisation. This paper shows that this has led to the neglect of contextual and place-related approaches and an unnecessarily high degree of over-simplification. Recently, as a reaction to this over-simplification, diversity and specific character has been particularly stressed in many European and national strategies for rural landscapes and conservation, but the processes of simplification still continue. Using examples from mixed agriculture and forestry landscapes in Portugal, Slovenia and Sweden, this paper aims to contribute to understanding the gap between centrally defined strategies for rural landscapes and awareness and management practices at local level. The three countries are situated at the outer fringes of Europe, and are complementary with their different degrees of urbanisation, forest distribution and tree-richness in the agricultural landscapes. Furthermore, the aim is to show how local landscape management is driven and to identify factors contributing to a better use of public policies through a participatory process with visions for the future. Systems of landscape classifications such as landscape character assessment often recognise the specific character of these landscapes, but have so far achieved very little for the preservation of their locally specific values, nor have they contributed to the development and the creation of new visions for future management. Such systems could contribute much more if they could be opened to adaptation on a more local scale in communication-led management planning.

The EU Common Agricultural Policy has historically been articulated into public budget payments and price support measures. From the distributive viewpoint, while the former are financed through the usual fiscal policy mechanisms (largely progressive), the financing structure of market price support (burdened on the consumers of food products) envisages a possible income regressive effect (via Engel’s law). The objective of the paper is to investigate the existence and the size of this effect. To achieve this aim we combine data and information from different sources (Bank of Italy, ISTAT, OECD, ISMEA). Our results support the existence of the regressive effect.

This study examined the effectiveness of agricultural protection policy and other macroeconomic variables on food supply, agricultural export, and farmers welfare in Nigeria, from 1980-2016 with a special interest in their relationship with the political economy. The specific objectives were to (i) estimate the degrees of agricultural protection, domestic agricultural food supply and economic welfare to farmers in Nigeria, (ii) determine the effectiveness of agricultural protection on food self-supply, agricultural export; and farmer-welfare. Data were obtained from secondary sources. Descriptive statistics and generalized method of moment (GMM) were used. Nigeria’s self-food supply was slightly above 50% while the rest of the consumption depended on importation. The welfare measure to farmers was relatively poor and not good enough to motivate them. There was a positive and significant relationship between export and agricultural protection. A significant and positive relationship also exists between farmer-welfare and protection in the sector.

This study examined the effectiveness of agricultural protection policy and other macroeconomic variables on food supply, agricultural export, and farmers welfare in Nigeria, from 1980-2016 with a special interest in their relationship with the political economy. The specific objectives were to (i) estimate the degrees of agricultural protection, domestic agricultural food supply and economic welfare to farmers in Nigeria, (ii) determine the effectiveness of agricultural protection on food self-supply, agricultural export; and farmer-welfare. Data were obtained from secondary sources. Descriptive statistics and generalized method of moment (GMM) were used. Nigeria’s self-food supply was slightly above 50% while the rest of the consumption depended on importation. The welfare measure to farmers was relatively poor and not good enough to motivate them. There was a positive and significant relationship between export and agricultural protection. A significant and positive relationship also exists between farmer-welfare and protection in the sector.

This study examined the effectiveness of agricultural protection policy and other macroeconomic variables on food supply, agricultural export, and farmers welfare in Nigeria, from 1980-2016 with a special interest in their relationship with the political economy. The specific objectives were to (i) estimate the degrees of agricultural protection, domestic agricultural food supply and economic welfare to farmers in Nigeria, (ii) determine the effectiveness of agricultural protection on food self-supply, agricultural export; and farmer-welfare. Data were obtained from secondary sources. Descriptive statistics and generalized method of moment (GMM) were used. Nigeria’s self-food supply was slightly above 50% while the rest of the consumption depended on importation. The welfare measure to farmers was relatively poor and not good enough to motivate them. There was a positive and significant relationship between export and agricultural protection. A significant and positive relationship also exists between farmer-welfare and protection in the sector.

Journal Article Europe's Agriculture: Reform of the Cap Get access John Marsh John Marsh Search for other works by this author on: Oxford Academic Google Scholar International Affairs, Volume 53, Issue 4, October 1977, Pages 604–614, https://doi.org/10.2307/2616231 Published: 01 October 1977